Use the financial statements shown below for the International Motor Corporation (IMC) to answer the following questions: a. Calculate the cash conversion cycle for IMC for both 2019 and 2020. What change has occurred, if any? All else being equal, how does this change affect IMC's need for cash? Answer: The cash conversion cycle (CCC) for 2019 is days. (Round to one decimal place.) Answer: The cash conversion cycle (CCC) for 2020 is days. (Round to one decimal place.) Answer: The cash cycle has . (Answer "increased", "decreased", or "not changed") Answer: All else being equal, this change (or lack of change) (answer "increases", "decreases", or "does not change") the amount of cash needed. b. IMC's suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable? (Hint: use a 365-day year.) Choose from the following. (Answer "A", "B", "C", or "D".) A. The firm is paying too early; it could be earning interest on its money. B. The firm should be paying after 30 days, if there is no penalty, to take advantage of additional cash on hand. C. The firm should be paying within 10 days. D. The firm is paying when it should be.

INTERNATIONAL MOTOR CORPORATION
INCOME STATEMENT (in millions) for the years ending December 31
	2019	2020
Sales	$80,000	$100,000
(-) Cost of goods sold	67,200	86,000
Gross profit	$12,800	$14,000
(-) Selling and general and administrative expenses	8,000	11,000
Operating profit	$4,800	$3,000
(-) Interest expense	2,000	2,500
Earnings before tax	$2,800	$500
(-) Taxes	1,120	200
Earnings after tax	$1,680	$300

INTERNATIONAL MOTOR CORPORATION
BALANCE SHEET (in millions) as of December 31
	2019	2020		2019	2020
Assets			Liabilities
Cash	$2,880	$6,300	Accounts payable	$4,320	$4,200
Accounts receivable	6,120	2,940	Notes payable	1,260	1,680
Inventory	6,480	9,240	Accruals	5,760	6,510
Total current assets	$15,480	$18,480	Total current liabilities	$11,340	$12,390
Net plant, property, and equip.	$20,520	$23,520	Long-term debt	$6,660	$11,430
Total assets	$36,000	$42,000	Total liabilities	$18,000	$23,820
			Equity
			Common stock	$1,800	$1,800
			Retained earnings	$16,200	$16,380
			Total equity	$18,000	$18,180
			Total liabilities and equity	$36,000	$42,000